NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 6, 20012002

TO THE STOCKHOLDERS OF SIEBEL SYSTEMS, INC.:Dear Stockholder:

Notice Is Hereby Giventhat     You are cordially invited to attend the Annual Meeting of Stockholders ofSiebel Systems, Inc., a DelawarecorporationDelaware corporation (the "Company"“Company”),. The meeting will be held on June 6, 20012002 at 11:2:00 a.m.,p.m. local time at the Marriott Hotel at 1770 South Amphlett Boulevard, San Mateo, CACalifornia 94402 for the following purposes:

1. To elect two directors to hold office until the 2004 Annual Meeting of Stockholders.

	1.	To elect three directors to hold office until the 2005 Annual Meeting of Stockholders.
	2.	To ratify the selection of KPMG LLP as the Company’s independent auditors for the year ending December 31, 2002.
	3.	To conduct any other business properly brought before the meeting.

2. To approve an amendment to the Company's Amended and Restated Certificate of Incorporation to increase the authorized number of shares of Common Stock from 800,000,000 shares to 2,000,000,000 shares.
3. To ratify the selection of KPMG LLP as independent auditors of the Company for its fiscal year ending December 31, 2001.
4. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

The foregoing     These items of business are more fully described in the Proxy Statement accompanying this Notice.

The Boardrecord date for the Annual Meeting is April 12, 2002. Only stockholders of Directors has fixedrecord at the close of business on April 25, 2001 as the recordthat date for the determination of stockholders entitled to notice of and tomay vote at this Annual Meeting and atthe meeting or any adjournment or postponement thereof.

San Mateo, California

May 4, 2001

All stockholdersYou are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy as promptly as possible in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for that purpose.your convenience. Even if you have given yourvoted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name.name from that record holder.

FOR THE 2002 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 6, 20012002

INFORMATION CONCERNING SOLICITATIONQUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING

GENERALWhy am I receiving these materials?

The     We sent you this proxy statement and the enclosed proxy is solicited on behalf ofcard because the Board of Directors of Siebel Systems, Inc., a Delaware corporation (the "Company" (sometimes referred to as “we,” “us,” “our,” the “Company” or “Siebel”), for use is soliciting your proxy to vote at the 2002 Annual Meeting of Stockholders (the “Annual Meeting”). You are invited to be held on June 6, 2001, at 11:00 a.m., local time (the "Annual Meeting"), or at any adjournment or postponement thereof, forattend the purposes set forth herein and in the accompanying Notice of Annual Meeting. The Annual Meeting will be held atand we request that you vote on the Marriott Hotel at 1770 South Amphlett Boulevard, San Mateo, CA 94402. Thisproposals described in this proxy statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.

     We intend to mail this proxy statement and accompanying proxy card were mailed on or about May 4, 2001April 29, 2002 to all stockholders of record entitled to vote at the Annual Meeting.

SOLICITATION

The Company will bear Unless otherwise indicated, the entire costdiscussions relating to the procedures for voting stock are applicable to holders of solicitationour common stock. Holders of proxies, including preparation, assembly, printing and mailing of this proxy statement, the proxy and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their namesexchangeable shares of Common Stock beneficially owned by othersSiebel Janna Arrangement, Inc. should refer to forward to such beneficial owners. The Company may reimburse persons representing beneficial ownersthe enclosed information sheet for further instructions on the procedures for exercising the votes associated with those exchangeable shares.

Who can vote at the Annual Meeting?

     Only stockholders of Common Stock for their costs of forwarding solicitation materials to such beneficial owners. Original solicitation of proxies by mail may be supplemented by telephone, telegram or personal solicitation by directors, officers or other regular employees of the Company. No additional compensation will be paid to directors, officers or other regular employees for such services.

VOTING RIGHTS AND OUTSTANDING SHARES

Only holders of record of Common Stock and Series A1 Preferred Stock of the Company at the close of business on April 25, 200112, 2002 will be entitled to notice of and to vote at the Annual Meeting. At the close of business on April 25, 2001, the Company had outstanding and entitled to vote 450,680,296On this record date, there were 472,363,297 shares of Common Stockcommon stock and one share of Series A1 Preferred Stock.Stock outstanding and entitled to vote. Each holder of record of Common Stock on such date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting. The holder of record of the Series A1 Preferred Stock on such date will be entitled to the number of votes equal to the number of exchangeable shares of Siebel Janna Arrangement, Inc. outstanding on such date (other than exchangeable shares outstanding in the name of the CompanySiebel or any of its affiliates), as described below. Montreal Trust Company of Canada (the "Trustee"“Trustee”) holds the one outstanding share of Series A1 Preferred Stock pursuant to a Voting and Exchange Trust Agreement among the Company,Siebel, Siebel Janna Arrangement, Inc., a Canadian subsidiary of the Company,Siebel, and the Trustee. Under that agreement, each holder of exchangeable shares issued by Siebel Janna Arrangement, Inc. (other than the CompanySiebel or any of its affiliates) is entitled to (i) direct the Trustee, the holder of record of the one share of Series A1 Preferred Stock, in the voting of the exchangeable shares held by it or (ii) pursuant to a proxy granted by the Trustee, either attend and vote at the Annual Meeting or have another person attend and vote on its behalf. Holders of the exchangeable shares, other than the CompanySiebel or any of its affiliates (either through, or pursuant to a proxy granted by the Trustee), will be entitled to one vote for each exchangeable share held. At the close of business on April 25, 2001,12, 2002, there were 2,459,9401,733,718 exchangeable shares outstanding (other than exchangeable shares outstanding in the name of the CompanySiebel or any of its affiliates).

The holders of record of Common Stock and the holders of exchangeable shares (acting through, or pursuant to a proxy granted by, the Trustee) will vote together as a single class on all matters to be voted upon at the Annual Meeting.

All votes will be tabulated by the inspector

If on April 12, 2002, your shares were registered directly in your name with Siebel’s transfer agent, Mellon Investor Services LLC, then you are a stockholder of election appointed forrecord. As a stockholder of record, you may vote in person at the meeting who will separately tabulate affirmativeor vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and negative votes, abstentionsreturn the enclosed proxy card to ensure your vote is counted.

     If on April 12, 2002, your shares were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and broker "non-votes." Underthese proxy materials are being forwarded to you by that organization. The organization holding your account is considered the General Corporation Lawstockholder of the State of Delaware, an abstaining vote and a broker "non-vote" are counted as present and are, therefore, includedrecord for purposes of determining whethervoting at the Annual Meeting. As a quorumbeneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares is presentin person at the meeting unless you request and obtain a meeting. With respect to Proposal 1, which requiresvalid proxy from your broker or other agent.

What matters am I voting on?

     There are two matters scheduled for a plurality vote, and Proposal 3, which requires the approval of a majority of the votes presentvote:

	•	Election of three directors to hold office until the 2005 Annual Meeting of Stockholders; and
	•	Ratification of KPMG LLP as the Company’s independent auditors for the year ending December 31, 2002.

     In addition, you are entitled to vote broker "non-votes" have no effect. However, with respecton any other matters that are properly brought before the meeting.

What are the recommendations of Siebel’s Board of Directors?

     The recommendations of Siebel’s Board of Directors are set forth in the description of each proposal in this proxy statement. In summary, Siebel’s Board of Directors recommends a vote:

	•	Forthe election of the three directors nominated to hold office until the 2005 Annual Meeting of Stockholders; and
	•	Forratification of the appointment of KPMG LLP as the Company’s independent auditors for the year ending December 31, 2002.

How do I vote?

You may either vote “For” all the nominees to Proposal 2, which requires the approvalBoard of Directors or you may withhold authority to vote for all or any nominee you specify. For each of the majorityother matters to be voted on, you may vote “For” or “Against” or abstain from voting. The procedures for voting are as follows:

     If you are a stockholder of record, you may vote in person at the Annual Meeting or vote by proxy using the enclosed proxy card. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote in person if you have already voted by proxy.

	•	To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive. You may then vote your shares at the meeting by completing and signing the ballot.

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	•	To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before or at the Annual Meeting, we will vote your shares as you direct. If your proxy card is not received by the date of the Annual Meeting, your shares will not be voted.

     If you are a beneficial owner of shares registered in the name of your broker, bank, dealer or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from Siebel. Simply complete and mail the proxy card to ensure that your vote is counted. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank, dealer or other agent. Follow the instructions from your broker, bank, dealer or other agent included with these proxy materials, or contact your broker, bank, dealer or other agent to request a proxy form.

Can I vote by telephone or electronically?

     If your shares were registered directly in your name with Siebel’s transfer agent, you may vote by telephone or electronically through the Internet by following the instructions included on your proxy card. The Internet and telephone voting procedures are designed to authenticate the stockholder’s identity and to allow stockholders to vote their shares and confirm that their voting instructions have been properly recorded.

     If your shares are held in the name of a broker, bank, dealer or other agent, otherwise known as being held in “street name,” and you have not elected to receive your financial communications over the Internet, you are eligible to vote your shares electronically over the Internet at www.proxyvote.com or by telephone. To vote your shares by telephone or by Internet, please follow the instructions indicated on the Vote Instruction Form included with this proxy statement. The deadline for voting by telephone or Internet is 1:00 p.m. Pacific Time on June 5, 2002.

     We would like to encourage all of our stockholders, both beneficial and of record, to receive future financial communications, including our Annual Report on Form 10-K, proxy statement and other documents relating to our future annual meetings of stockholders, via the Internet. Receiving these financial communications electronically will assist us in controlling the costs relating to the printing and distribution of these materials. If you are a holder of record, you may elect to receive future financial communications over the Internet by following the instructions included on your proxy card and if you are a beneficial holder, by enrolling your email address at www.investordelivery.com using the control number provided in the Vote Instruction Form included with this proxy statement.

How many votes do I have?

     On each matter to be voted upon, you have one vote for each share of our common stock you own as of April 12, 2002.

What if I return a proxy card but do not make specific choices?

     If you return a signed and dated proxy card without marking any voting selections, your shares will be voted “For” the election of all three nominees for director, and “For” ratification of KPMG LLP as the Company’s independent auditors for the year ending December 31, 2002. If any other matter is properly presented at the meeting, your proxy (one of the votes outstanding, broker "non-votes"individuals named on your proxy card) will vote your shares using his best judgment.

Who is paying for this proxy solicitation?

     We will pay for the entire cost of soliciting proxies, including preparation, assembly, printing and mailing of this proxy statement, the proxy and any additional information furnished to stockholders. We will

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What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, your shares are registered in tabulationsmore than one name or are registered in different accounts. Please complete, sign and returneachproxy card to ensure that all of votes castyour shares are voted.

     If you would like to modify your instructions so that you receive one proxy card for each household, please contact your broker, bank, dealer or other agent, if you hold shares in street name, or Mellon Investor Services LLC, the Company’s transfer agent, at (800) 522-6645, or via the Internet at www.melloninvestor.com, if you hold shares in your name.

What does it mean if multiple members of my household are stockholders but we only received one set of proxy materials?

     In accordance with a notice sent earlier this year to certain brokers, banks, dealers or other agents, we are sending only one Annual Report on proposals presentedForm 10-K and proxy statement to that address unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, if any shareholder residing at such an address wishes to receive a separate Annual Report on Form 10-K or proxy statement in the stockholders for purposes of determining whether a proposal has been approved, abstentions have the same effect as negative votes on Proposals 2 and 3.

REVOCABILITY OF PROXIES

Any person giving a proxy pursuantfuture, they may telephone our Investor Relations department at (650) 477-5000 or write to this solicitation has the power to revoke itour Investor Relations department at any time before it is voted. It may be revoked by filing with the Secretary of the Company at the Company's principal executive offices, 2207 Bridgepointe Parkway, San Mateo, CA 94404, a written notice of revocation or a duly executedCalifornia 94404.

Can I change my vote after submitting my proxy?

     Yes. You can revoke your proxy bearing a later date, or it may be revoked by attendingat any time before the meeting and voting in person. Attendancefinal vote at the meeting will not, by itself,Annual Meeting. You may revoke a proxy. Holdersyour proxy in any one of exchangeable shares who wish to direct the Trustee to cast the votes attached to the Series A1 Preferred Stock on their behalf should follow carefully the instructions provided by the Trustee, which accompany this Proxy Statement.three ways:

STOCKHOLDER PROPOSALS

	•	You may submit another properly completed proxy card with a later date.
	•	You may send a written notice that you are revoking your proxy to Siebel’s Corporate Secretary at our principal offices, 2207 Bridgepointe Parkway, San Mateo, California 94404.
	•	You may attend the Annual Meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy.

When are stockholder proposals due for next year’s Annual Meeting?

The deadline for submitting a stockholder proposal or director nomination for inclusion in the Company'sour proxy statement and form of proxy for the Company's 2002our 2003 Annual Meeting of Stockholders pursuantis December 30, 2002. Please submit all proposals in writing to Rule 14a-8 of the Securities and Exchange Commission (the "SEC") is January 4, 2002.Siebel’s Corporate Secretary at 2207 Bridgepointe Parkway, San Mateo, California 94404. Stockholders wishing to submit a proposal or director nominations at the 20022003 Annual Meeting (that may be considered at the 20022003 Annual Meeting but arewhich will not to be included in suchthe proxy statement and proxy) must do so between March 9, 20028, 2003 and April 8,7, 2003.

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How are votes counted?

     Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count “For” and “Against” votes, director nominees for whom authority to vote has been withheld (with respect to Proposal 1), abstentions (with respect to Proposal 2) and broker “non-votes.” A broker “non-vote” refers to a particular proposal for which a broker or bank does not have the authority to vote. With respect to Proposal 1, the election of directors, withheld votes and broker “non-votes” will not be voted with respect to the directors indicated, nor will they be included in the tabulation of votes cast and therefore, will have no effect. With respect to Proposal 2, the selection of KPMG LLP as the Company’s independent auditors for the year ending December 31, 2002, abstentions and broker “non-votes” will be included in the tabulation of votes cast and therefore will have the same effect as a vote “Against” Proposal 2.

How many votes are needed to approve each proposal?

	•	For the election of directors, the three nominees receiving the most “For” votes (among votes properly cast in person or by proxy) will be elected. Broker “non-votes” will have no effect.
	•	To be approved, Proposal No. 2, the selection of KPMG LLP as the Company’s independent auditors for the year ending December 31, 2002, must receive a “For” vote from the majority of shares present and entitled to vote either in person or by proxy. If you do not vote, or “Abstain” from voting, it will have the same effect as an “Against” vote, as will broker “non-votes.”

What is the quorum requirement?

     A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares are represented by votes at the meeting or by proxy. On April 12, 2002, the record date, there were 472,363,297 shares of common stock outstanding and entitled to vote.

     Your shares will be counted towards the quorum only if you submit a valid proxy vote or vote at the meeting. Abstentions and broker “non-votes” will be counted as present and, therefore, count towards determining whether a quorum is present at the Annual Meeting. If there is no quorum, a majority of the votes present at the meeting may adjourn the meeting to another date.

How can I find out the results of the voting at the Annual Meeting?

     Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in our Quarterly Report on Form 10-Q for the second quarter of 2002.

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PROPOSAL 1

ELECTION OF DIRECTORS

The Company'sCLASSIFIED BOARD

     Siebel’s Amended and Restated Certificate of Incorporation and bylawsBylaws provide that the Board of Directors shall be divided into three classes, eachclasses. Each class consisting,consists, as nearly as possible, of one-third of the total number of directors, withand each class havinghas a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy (including a vacancy created by an increase in the Boardnumber of Directors)directors) shall serve for the remainder of the full term of the class of directors in which the vacancy occurred, and until such director'sthe director’s successor is elected and has qualified.

The Board of Directors is presently composed ofhas eight members. There are twothree directors in the class whose term of office expires in 2001.2002. Each of the nominees for election to this class is currently a director of the Company and was previously elected by the stockholders.Siebel. If elected at the Annual Meeting, each of thethese nominees would serve until the 20042005 Annual Meeting of Stockholders and until his successor is elected and has qualified, or until such director's earlierthe director’s death, resignation or removal.

Directors are elected by a plurality of the votes attached to the shares present in person or represented by proxy and entitled to vote at the meeting.Annual Meeting. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the twothree nominees named below. In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as management may propose. Each person nominated for election has agreed to serve if elected, and management has no reason to believe that any nominee will be unable to serve.

Set forth below     The following is biographical information fora brief biography, as of January 31, 2002, of each person nominatednominee and each persondirector whose term of office as a director will continue after the Annual Meeting.

NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 20042005 ANNUAL MEETING OF STOCKHOLDERS

Charles R. Schwab, age 63, has served as a Director of the Company since October 1994. Since November 1997, Mr. Schwab has been the Chairman and Co-Chief Executive Officer of The Charles Schwab Corporation, a brokerage firm that he founded in 1971. From 1987 until November 1997, Mr. Schwab served as The Charles Schwab Corporation's Chairman and Chief Executive Officer. Mr. Schwab also serves as a director of The Gap, Inc. and is a member of the Board of Trustees of Stanford University. Mr. Schwab received a B.A. in Economics from Stanford University and an M.B.A. from the Graduate School of Business at Stanford University.

George T. Shaheen, age 56, has served as a Director of the Company since October 1995. From September 1999 until April 2001, Mr. Shaheen served as President and Chief Executive Officer and a member of the Board of Directors of Webvan Group, Inc. From 1989 to September 1999, Mr. Shaheen was the Managing Partner and Chief Executive Officer of Andersen Consulting (now Accenture). Mr. Shaheen was a partner of Andersen Consulting from 1977 to September 1999 and held various other positions at Andersen Consulting from 1967 to 1977. Mr. Shaheen is on the Board of Trustees at Bradley University and is a member of the Board of Advisors for the Northwestern University J.L. Kellogg Graduate School of Business. Mr. Shaheen received a B.S. in Marketing and an M.B.A. from Bradley University.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTEFOR EACH NAMED NOMINEE.

DIRECTORS CONTINUING IN OFFICE UNTIL THE 2002 ANNUAL MEETING

Thomas M. Siebel,, age 48,49, has served as Chairman and Chief Executive Officer of the Company since its inception in July 1993. From July 1993 until May 1999, Mr. Siebel also served as the Company'sCompany’s President. From July 1991 until December 1992, he served as Chief Executive Officer of Gain Technology, a multimedia software company whichthat merged with Sybase in December 1992. Mr. Siebel served as President and Chief Operating Officer of Gain Technology from May 1991 to July 1991. From January 1984 until September 1990, Mr. Siebel worked at Oracle Corporation where he held a number of executive management positions including Vice President, Product Line Marketing; Group Vice President, Industry Marketing; Group Vice President and General Manager, Direct Marketing Division; and most recently, Group Vice President, Oracle USA. Mr. Siebel is a graduate of the University of Illinois at Urbana-Champaign from which he holds a B.A. in History, an M.B.A. and an M.S. in Computer Science.

James C. Gaither, age 63,64, has served as a Director of the Company since February 1994. Since July 2000, Mr. Gaither has been a Managing Director of Sutter Hill Ventures. From February 1994 to April 1998,Mr. Gaither served as Secretary of the Company. From 1971 to 2000, Mr. Gaither was a Partner of, and currently is Senior Counsel to, the law firm Cooley Godward LLP. Prior to beginning his law practice with the firm in 1969, he served as law clerk to The Honorable Earl Warren, Chief Justice of the United States; Special Assistant to the Assistant Attorney General in the U.S. Department of Justice; and Staff Assistant to the President of the United States, Lyndon Johnson. Mr. Gaither is a former president of the Board of Trustees at Stanford University, and is a former member of the Board of Trustees of the Carnegie Endowment for International Peace and RAND. He is currently a Director at The William and Flora

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Marc F. Racicot, age 52,53, has served as a Director of the Company since April 2001. Since February 2001, Mr. Racicot has been a Partner of the law firm Bracewell & Patterson L.L.P. From 1993 until January 2001, Mr. Racicot served as the Governor of the State of Montana and from 1989 until 1993 he served as its Attorney General. Prior to being elected Attorney General in 1989, Mr. Racicot was an Assistant Attorney General and Special Prosecutor for the State of Montana. Mr. Racicot began his legal career as a prosecutor in the United States Army in West Germany, eventually becoming the Chief Prosecutor for the largest U.S. military jurisdiction in Europe. While serving as an Army JAG Officer, he taught business and criminal law for the University of Maryland. Mr. Racicot serves as the Chairman of the Board of Directors for Jobs for America's Graduates, Chairman of America's Promise, The Alliance for Youth,Republican National Committee and is on the Board of Directors for theJobs for America’s Graduates and The Corporation for National Service, and the Mike and Maureen Mansfield Foundation, as well as the Board of Visitors for the University of Montana School of Law.

THE BOARD OF DIRECTORS RECOMMENDS

DIRECTORS CONTINUING IN OFFICE UNTIL THE 2003 ANNUAL MEETING OF STOCKHOLDERS

Patricia A. House, age 46,47, has served as a Director of the Company since January 2001. Ms. House has been with the Company since its inception in July 1993 and has served as the Company'sCompany’s Vice Chairman, Co-Founder and Vice President, Strategic Planning since January 2001. From February 1996 to January 2001, she served as the Company'sCompany’s Executive Vice President and from July 1993 to February 1996 as Senior Vice President, Marketing. Ms. House received a B.A. in Education from Western Michigan University.

Eric E. Schmidt,, Ph.D., age 46,47, has served as a Director of the Company since May 1996. Since April 1997,July 2001, Dr. Schmidt has been the Chairman and Chief Executive Officer of Google, Inc., a provider of Internet search technology. From April 1997 to July 2001, Dr. Schmidt was the Chairman of the Board of Directors and the Chief Executive Officer of Novell, Inc., a software supplier for large networks. In connection with Novell's pending acquisition of Cambridge Technology Partners, Dr. Schmidt will remain Chairman of the Board of Directors, step down as Chief Executive Officer and become Novell's chief strategist. From 1983 to 1997, Dr. Schmidt held various positions at Sun Microsystems, Inc., including Chief Technology Officer; Corporate Executive Officer; President, Sun Technology Enterprises; Vice President, General Systems Group; and Vice President and General Manager, Software Products division. Prior to joining Sun Microsystems, Inc., Dr. Schmidt was a member of the research staff at the Computer Science Lab at Xerox Palo Alto Research Center (PARC). He also held positions at Bell Laboratories and Zilog. Dr. Schmidt also serves as Chairman of the Board of Directors of Google, Inc. and Volera, Inc., a Novell subsidiary, and as a director of Integrated Archive Systems and TilionZilog, Inc. Dr. Schmidt received a B.S. in Electrical Engineering from Princeton University, an M.S. in Electrical Engineering and a Ph.D. in Computer Science from the University of California at Berkeley.

A. Michael Spence,, Ph.D., age 57,58, has served as a Director of the Company since October 1995. Since September 1999, Dr. Spence has served as a Partner of Oak Hill Venture Partners. Dr. Spence served as Professor of Management in the Graduate School of Business at Stanford University until August 2000. From 1990 until August 1999, Dr. Spence served as Phillip H. Knight Professor and Dean of the Graduate School of Business at Stanford University. From 1984 to 1990, Dr. Spence served as Dean of Faculty of Arts and Sciences at Harvard University. Dr. Spence also serves as a director of Blue Martini Software, Inc., General Mills, Inc., Nike, Inc., Torstar CorporationExult Inc. and ITI EducationTorstar Corporation. Dr. Spence received a B.A. in Philosophy from Princeton University, a B.A. and an M.A. in Mathematics from Oxford University and a Ph.D. in Economics from Harvard University. Dr. Spence is a 2001 recipient of the Nobel Memorial Prize in Economic Sciences.

DIRECTORS CONTINUING IN OFFICE UNTIL THE 2004 ANNUAL MEETING OF STOCKHOLDERS

Charles R. Schwab, age 64, has served as a Director of the Company since October 1994. Since November 1997, Mr. Schwab has been the Chairman and Co-Chief Executive Officer of The Charles Schwab Corporation, a brokerage firm that he founded in 1971. From 1987 until November 1997,

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George T. Shaheen, age 57, has served as a Director of the Company since October 1995. From September 1999 until April 2001, Mr. Shaheen served as President, Chief Executive Officer and Chairman of the Board of Directors of Webvan Group, Inc. From 1989 to September 1999, Mr. Shaheen was the Managing Partner and Chief Executive Officer of Andersen Consulting (now Accenture). Mr. Shaheen was a partner of Andersen Consulting from 1977 to September 1999 and held various other positions at Andersen Consulting from 1967 to 1977. Mr. Shaheen is on the Board of Trustees at Bradley University and is a member of the Board of Advisors for the Northwestern University J.L. Kellogg Graduate School of Business. Mr. Shaheen received a B.S. in Marketing and an M.B.A. from Bradley University.

BOARD COMMITTEES AND MEETINGS

During the fiscal year ended December 31, 2000, the2001, our Board of Directors held six meetings and acted by unanimous written consent threetwo times. TheOur Board of Directors has appointed an Audit Committee and a Compensation Committee.

The Audit Committee makes recommendations to theour Board of Directors regarding the selection of independent auditors, reviews the results and scope of the audit and other services provided by the Company'sour independent auditors and reviews and evaluates the Company'sour audit and control functions. In performing its duties, the Audit Committee conducts quarterly meetings with the Company'sour independent auditors.auditors and financial personnel. All members of the Company'sour Audit Committee are independent (as independence is defined in Rule 4200(a)(15) of the NASD listing standards). To ensure that the Audit Committee has an independent and confidential view of the Company'sour management, andour internal controls, and our policies and procedures as they relate to the quality and reliability of the Company'sour financial statements and disclosures, these meetings are conducted independent of the Company'sour management. The Audit Committee is composed of three non-employee directors: Mr.Messrs. Shaheen, Gaither Mr. Schwab and Mr. Shaheen.Schwab. The Audit Committee met fivefour times during the fiscal year ended December 31, 2000. The Audit Committee has adopted a written Audit Committee Charter that is attached hereto as Appendix A.2001.

The Compensation Committee makes recommendations concerning salaries and incentive compensation, awards stock options to employees and consultants under the Company'sour 1996 Equity Incentive Plan and 1998 Equity Incentive Plan and otherwise determines compensation levels and performs such other functions regarding compensation as theour Board of Directors may delegate. The Compensation Committee is composed of two non-employee directors: Drs. Schmidt and Spence. The Compensation Committee held one meeting and acted by written consent thirteen17 times during the fiscal year ended December 31, 2000.2001.

During the fiscal year ended December 31, 2000, all directors2001, each member of our Board of Directors attended at least 75% or more of the aggregate of the meetings of the Board and of the committees on which theyhe or she served, held during the period for which they werehe or she was a director or committee member, respectively.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS¹

Effective January 31,During 2000, the SEC adopted new rules and amendmentsAudit Committee developed the charter under which it reviewed the Company’s financial statements for the year ended December 31, 2001, a copy of which was included as Appendix A to current rules relating to the disclosure of information about companies' audit committees. In large part, the new rules are based on recommendations made by the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees. The new rules require that, for all votes of stockholders occurring after December 15, 2000, theour proxy statement must contain a report of the audit committee addressing several issues identified in the rules. In addition,filed with the SEC recommends that audit committees adopt written charters. Any suchon April 30, 2001. In April 2002, the Audit Committee developed its current charter, must be included as an attachment to the proxy statement at least once every three years. Ourwhich was approved by our Board of Directors adoptedin April 2002 and is included as Appendix A hereto.

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Our Audit Committee consists of three directors, all of whom are independent directors. Consistent with Nasdaq'sNasdaq’s independent director and audit committee listing standards, as amended on December 14, 1999, a director will not be considered "independent"“independent” if, among other things, he or she has:

• been employed by the corporation or its affiliates in the current or past three years; accepted any compensation from the corporation or its affiliates in excess of $60,000 during the previous fiscal year (except for board service, retirement plan benefits, or non-discretionary compensation);

	•	been employed by the corporation or its affiliates in the current or past three years; accepted any compensation from the corporation or its affiliates in excess of $60,000 during the previous year (except for board service, retirement plan benefits, or non-discretionary compensation);
	•	an immediate family member who is, or has been in the past three years, employed by the corporation or its affiliates as an executive officer;
	•	been a partner, controlling stockholder or an executive officer of any for-profit business to which the corporation made, or from which it received, payments (other than those which arise solely from investments in the corporation’s securities) that exceed five percent of the organization’s consolidated gross revenues for that year, or $200,000, whichever is more, in any of the past three years; or
	•	been employed as an executive of another entity when any of the company’s executives serve on that entity’s compensation committee.

• an immediate family member who is, or has been in the past three years, employed by the corporation or its affiliates as an executive officer;
• been a partner, controlling stockholder or an executive officer of any for-profit business to which the corporation made, or from which it received, payments (other than those which arise solely from investments in the corporation's securities) that exceed five percent of the organization's consolidated gross revenues for that year, or $200,000, whichever is more, in any of the past three years; or
• been employed as an executive of another entity when any of the company's executives serve on that entity's compensation committee.

In accordance with the Audit Committee's charter, the     The Audit Committee assists our Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of our accounting, auditing and financial reporting practices. Management is responsible for our internal controls. Our independent auditors are responsible for performing an independent audit of our consolidated financial statements in accordance with generally accepted auditing standards and issuing a report thereon. The Audit Committee has general oversight responsibilities with respect to our financial reporting and reviews the results and scope of the audit and other services provided by our independent auditors. In addition, the Audit Committee reviewed and discussed all financial statements and the accounting policies followed by Siebel prior to the issuance of the financial statements with both management and our outside auditors.

In this context, the Audit Committee has reviewed and discussed the audited financial statements for fiscal year 20002001 with management and with the independent auditors. Specifically, theThe Audit Committee has also reviewed the selection, application and disclosure of the Company’s critical accounting policies, as described in SEC Financial Reporting Release 60 “Cautionary Advice Regarding Disclosure About Critical Accounting Policies,” with management and the independent auditors. The Audit Committee has also discussed with the independent auditors the matters required to be discussed by SAS 61, as amended (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other things:

• methods used to account for significant unusual transactions;
• the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus;
.
• the process used by management in formulating particularly sensitive accounting estimates and the basis for the auditors' conclusions regarding the reasonableness of those estimates; and
• disagreements with management over the application of accounting principles, the basis for management's accounting estimates and the disclosures in the financial statements.

The Audit Committee has received the written disclosures and the letter from our independent auditors, KPMG LLP, required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees. Additionally, the Audit Committee has discussed with KPMG LLP the issue of its independence from us.

Based on its review of the audited financial statements and the various discussions noted above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2000.2001.

George T. Shaheen, Chairman
James C. Gaither

	George T. Shaheen, Chairman
	James C. Gaither
	Charles R. Schwab

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¹ This Section is not "soliciting materials," is not deemed "filed" with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended (the "1933 Act"), or the Securities Exchange Act of 1934 (the "1934 Act"), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.